By Hema Senanayake –
The proposition in the above caption is not something that I am proposing. Instead, it has been proposed by the 21st Century socialists. The above caption is the 2nd characteristic out of the five characteristics proposed by Bolivarian revolutionaries for 21st century socialism. Sumansiri Liyanage brought the said list to our notice through one of his recent articles to Colombo Telegraph.
In regard to the above point, one of the readers of Colombo Telegraph, namely Ramona Therese Fernando who wrote a comment to one of my articles related to the same issue. Since she raised a question which resonates with many “passionate” people, I promised her a detailed reply. This is it. In regard to human needs, she now observes as follows:
“We need Non-GMO paddy-fields, vegetables and fruits; we need cotton to weave our clothes. We need some stationary and confectionary. We need some furniture; we need some kitchen utensils, and nice housing. We need some movies to watch, and some sports to play, beer and toddy to drink, and some movies to watch. We need some jewelry; we need some cosmetics, some deodorant and a bit of perfume from flowers.”
“But what on earth do we want i-phones, i-pads, online games industry, space age building space-ships to Mars, and experimental GMO-food production so colony on Mars can be started, Robots to take over human jobs, rampant sex industry and uncontrolled online ditto, FB and on CT (although these two are part of the “economic efficiency” capitalistic money making trend, they can fortunately give interactive awareness into the foibles of the money making psychosis). And on top of that is the Casio industry to use the ultimate excess of human greed to be the final frontier of the money-market.”
Her observation is interesting. I think it is her genuine opinion about human needs. I have nothing against her. A few years ago, a religious leader who felt in the same way as Ramona, launched a campaign in the United States to stop shopping, and his church was named as “Stop-shopping Church.” I have nothing against them too. But unfortunately there is a law in economics that prevents in indulging extreme consumerism. We all got to behave according to that law until we change that economic law consciously. Extreme consumerism, even though it appears to be originating from individual human choice, it is not so; rather, it is a systemic need. This is the point I want to explain in this article, so that 21st Century socialist might understand that it requires to replace the existing economic law or rule with a new economic law that supports avoiding extreme consumerism if they are serious about consumerism. This might require a greater wisdom and analysis than putting up slogans like the one mentioned in the caption above.
Before, I explain the said economic law, let me bring another piece of economic theory which is known as “marginal utility theory.” The same theory is sometime known as the “law of diminishing marginal utility.” Economists believe that this theory or law explains a rationale behavior of human kind. Let me explain it by citing a simple example. If you drink a glass of water when you feel thirsty, you might feel a greater utility of that glass of water. Now, you are being offered another glass of water, then perhaps still you feel the utility (usefulness) of that second glass of water but not by so much as of the first glass of water. This situation is generalized by economists as follows:
“The first unit of consumption of a good or service yields more utility than the second and subsequent units” (Wikipedia). This seems rationale and logical. But this law is not true; perhaps it might be true only for water; yet, in regard to a greater number of consumable goods and services, it seems the marginal utility theory is not true.
In general, psychologists agree that the marginal utility theory explains a very natural human behavior. But this behavior has been distorted in the present capitalist system. People want to consume more and more or they have been pushed to consume more and more. There is a certain economic parameter known as “consumer confidence index.” It measures the consumers’ interest in buying things. If consumer confidence is good the government is happy. If consumer confidence is weak then the government knows that an economic recession is around the corner. Therefore, governments do whatever possible to increase consumer confidence. In other words governments want people to keep buying more and more. Can you ever think of stopping consumerism under these circumstances? Never!
An economic recession means the reduction of output gradually. When output is reduced for two consecutive quarters, then it is officially defined as a recession by economists. When system produces less, then it requires lesser amount of workers. Hence, in fact, reduction of output in a recession is not the real problem, instead the real problem is the unemployment created by recessions. Modern capitalism has temporarily resolved the question of unemployment by promoting consumerism. That is why they keep an eye on “consumer confidence index.”
Capitalist economist John Maynard Keynes presents an important theory about unemployment and a suggestion to prevent unemployment. He says that any employer or consumer goods producer would produce something with an expectation that he would get a certain income out of the expenditure of consumers. If he did not get what he expects then he reduce his production and slashed jobs. This is common sense. Further Keynes says that when the income of the community increases people tend to save more since their needs have already been satisfied. This idea too, is very logical. Read the next point carefully. Keynes further insists that if the peoples’ savings are not invested, entrepreneurs would not get back what they expect from consumers. If this happens what the entrepreneurs would do? – They slash jobs. Even if savings are invested it also must be done subject to one condition. That condition is that the investments made must not produce goods or services for immediate consumption. If investments produce goods for immediate consumption, again entrepreneurs would not get back what they expect from consumer spending which would result unemployment. Hence, investments must be used to produce goods and services which would be made available in the future. If that happens there will be full employment, since entrepreneurs get back what they expect from consumers. This is an accurate explanation of modern capitalistic production system.
Now, what does it mean by investing in producing goods and services which would be made available in the future? It simply means that we need to add more and more consumable output year after year. For what? – In order to ensure that we have full employment. This is why capitalist economists keep an eye on “consumer confidence index.” This is how extreme consumerism has been a systemic need in modern capitalist system. For people keeping their employment is much more important than countering consumerism.
This system cannot be replaced just putting up more humane slogans. This system can be replaced only by an alternative economic system in which entrepreneurs would get back what they expect from consumers at any level of production; no matter whether the production is increased or decreased or stay stagnant based on individual consumer preference. In such a system only we can counter consumerism while having full employment. In fact in such a system only we can nurture the natural human behavior that explains in marginal utility theory.
However, if 21st Century socialists think that such a system can be put in place in a society where the production is done according to the “Natural unadulterated instinct of each group and race of people”, I am sorry; I have no argument for them. Rather, I like to go for a systemic change which supports human “instinct”.